HHI drops 60 executives as part of rebuildingHyundai Heavy Industries Group will cut 25 percent of executives from its shipbuilding affiliates as part of its restructuring efforts, the group announced on Thursday.
Industry insiders see the move as the beginning of a massive reshuffle by the troubled shipbuilders.
“The measure was inevitable as the government speeds up its restructuring process for shipbuilders and the company sits on the worst performance results since its founding,” the company said in a statement.
The five shipbuilding-related affiliates involved in the reshuffle are Hyundai Heavy Industries, Hyundai Mipo Dockyard, Hyundai Samho Heavy Industries, HYMS and Hyundai Engineering & Technology. Following the reshuffle, about 60 executives are expected to leave the company.
To fill the operational vacuum, seven senior vice presidents, including Park Seoung-yong, have been promoted to executive vice president positions while 11 vice presidents are filling senior vice president positions. No new executives were appointed.
The heads of group affiliates have returned all of their wages while executive level employees have turned in as much as half, following the emergency measures implemented in November last year.
The company is also cutting labor costs. Extra work on holidays or after regular working hours will be terminated for regular employees, according to the company on Tuesday.
As Hundai has started the layoffs, all eyes are now on restructuring measures at the other two giant shipbuilders, Daewoo Shipbuilding & Marine Engineering (DSME) and Samsung Heavy Industries.
DSME and Samsung Heavy Industries already cut 30 percent of their executives last year.
Following the government announcement on industrial restructuring Tuesday, DSME is expected to lay off an additional 2,300 workers by 2019, while other shipbuilders are also facing similar cost-cutting measures.
Hyundai Heavy Industries earlier this week posted 325.2 billion won ($285.1 million) in operating profits for the first quarter, the first record surplus in 10 quarters, but later conceded that the profits were largely due to external factors.
BY KIM JEE-HEE [email@example.com]